The popular label, well known for its designer handbags, has gotten its Christmas shopping done early with yet another lucrative takeover

Michael Kors, the US fashion company, have completed their second major takeover in as many years with the $2.1bn (£1.64bn) acquisition of Versace. This follows their 2017 purchase of London shoemaker Jimmy Choo for £900m.

Following the confirmation of the Versace deal last Tuesday, Kors confirmed that all three brands would merge to form a new company, Capri Holdings. Capri is supposedly a reference to the popular holiday island for affluent fashionistas.

The Versace family, who inherited the company after the infamous murder of Gianni Versace in 1997, held an 80% stake of the company prior to the takeover and was divided between three members of the Versace family. Gianni’s niece, Allegra, held the biggest stake at 40%. Gianni’s older brother, Santo’s stake came to 24% and the smallest stake belonged to Gianni’s sister, Donatella (16%).

It was revealed that Donatella will stay on as the brand’s chief designer despite the takeover. The other 20%, owned by US private equity firm Blackstone following a purchase in 2014, have confirmed they will sell all of their holding. The Versace family’s 80% stake, worth roughly €1.5bn, has been reduced to a €150m holding in the fashion house following the takeover.

Donatella Versace, who will continue in her dual role as vice-president and artistic director, commented positively on the deal, highlighting that the partnership would be key to Versace reaching the next level in its development. “We believe that being part of this group is essential to Versace’s long-term success,” she said. “My passion has never been stronger. This is the perfect time for our company, which puts creativity and innovation at the core of all of its actions, to grow.”

As for Michael Kors, the acquisition of Versace and Jimmy Choo are the first steps in the company’s transformation into a more luxurious label. Kors plan to close 100 of its stores and condense its product line whilst simultaneously increasing Versace shops from 200 to 300. Kors have projected that this will lead to a 25% increase in accessory and footwear sales.

The sale of Versace continues the trend of luxury fashion brands being sold to conglomerates. Last year, Dior was bought by Moet Hennessy Louis Vuitton for $13bn, meaning that Dior and Louis Vuitton are now owned by the same company. And over the summer Missoni sold 41% of its stake to a private Italian equity venture for €70m whilst Dries Van Noten sold a majority holding to Spanish luxury group Puig.

This makes Chanel the rarest of rare breeds in European luxury fashion. Chanel are now the only major European luxury fashion house still in private hands. The company is currently owned by Alain and Gerard Wertheimer, grandsons of Pierre Wertheimer. Wertheimer was the former business partner of Coco Chanel.